IASB mulls update to IFRS for SMEs
The International Accounting Standards Board is considering an update to IFRS for SMEs, its stripped down version of International Financial Reporting Standards for small and midsize entities, the second major update to the standards since it was introduced in 2009, to reflect the changes over the past decade in the complete set of standards used by companies around the world.
The IASB said Tuesday it is asking for views on the approach it should take. IFRS for SMEs is required or permitted in more than 80 countries and is used by millions of companies, including some private companies in the U.S., even though it doesn’t fully align with U.S. GAAP.
The objective of the consultation is to seek views on whether and how to align the IFRS for SMEs Standard with the full IFRS standards, which are aimed at public companies and currently required by financial regulators in more than 140 jurisdictions around the world. IFRS for SMEs is mostly used by small and medium-size private companies.
“This review is about determining to what extent the IFRS for SMEs standard should be updated for developments in IFRS standards and ensuring it remains a high-quality Standard for the millions of companies that have begun using it since it was first issued 10 years ago,” said IASB chairman Hans Hoogervorst (pictured) in a statement.
The IASB issued IFRS for SMEs in July 2009 in response to international demand for a standard for small and medium‑sized entities. After considering the feedback received during the development of IFRS for SMEs, the IASB decided to review the set of standards periodically. The first comprehensive review of IFRS for SMEs began in 2012, and an amended set of standards was issued in 2015 and took effect on Jan. 1, 2017.
The request for information asks for views on different approaches to updating IFRS for SMEs, along with feedback on how the standard could be aligned with newer IFRS standards, such as IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases.
For more information, see the Request for Information: Comprehensive Review of the IFRS for SMEs Standard. The IASB is asking for responses to be sent by July 27. There is also a Snapshot available providing a summary of the consultation document. Any proposed changes will be subject to further consultation.